UK heading for collapse within a few years

Nov 2011

As we continue "austerity" the public has no idea that we haven't even started yet. For the last 40 years we have spent more than we have earned! They just don't understand, the media and politicans ensure that they  don't find out so no one gets the blame. The small cuts we have had in 2011 is nothing compared to the reall cuts we need for the next 10 years. I think we will be in the same place as we were in the 1970s when we had to call the IMF in and introduce capital controls to prevent money leaving the country.

Already, Goldman Sachs clients have begun shorting UK based companies and banks (they were doing the same to Italy in June 2011 and we can see where that ended). Since politicians can't or won't tell people the truth we will end up with technocrats controlling our budget so the politicians can finally say they have no control and shouldn't be blamed. Sadly, for all their wailing about responsibility they will lump the future of the country on our children by increasing deficits. Its not a Labour or a Conservative problem, its a systemic problem. Our politics in broken. New governments don't change anything.

We are in a depression. Even in 1920s they didn't talk about a "depression" until later.  One further question to ask you all - Would you ask an unqualified surgeon to operate on you? Then why do we give control of the economy to people who have no basic training in economics expect to please the people by telling them what they want? We complain about politicians, but its the system thats broken. People need to stop asking to be told what they want to hear!!

I like to mention solutions along with highlighting issues (unlike our politicians):

Here's an idea - Cut Winter Fuel Allowance for those earning more than 30K a year. It'll save around £500m, or put another away most of the money needed to prevent tuition fees in universities. Simples.

Comments welcome.

Why the stock market will fall for the next couple of years (2011-2015)?

An impasse has been reached. In your heart of hearts most of you know when you're getting a deal that's too good to be true. That's what we've had for about 20 years now. We lurch from crisis (1975) to crisis (2008) without fixing any underlying problems. Our system just doesn't seem to cope well with the idea of steady growth (with occasional growth spurts). Everyone in the population wants to be part of the "spurt" this in turn leads to a lurching economy that rolls from one extreme to another.

How sad it is that millions have to suffer because of our own inadequacies. Maybe Tom Cruise was right in the film A Few Good Men - "We just can't handle the truth!". So politicians can't tell us the truth. I'm not blaming them, I'm blaming the Western world. The whole idea of politicians is to have someone deal with issues that we have no interest in. I don't blame them for taking advantage. If they told us the truth (like Ron Paul in the US and some of Vince Cable in Britain) we just don't elect them. Divided we will fall - and the rich shall continue to inherit the Earth. By rich I mean the old moneyed class who simply use labour as a productive asset to gain a large inequity between the working class (if you work, thats you!) and them. The money they have is essentially wasted unless it is funnelled to entrepreneurial ventures. Don't get me wrong - if we taxed them, the Government would also waste the money so I don't think they should be taxed to death either.

The problem lies with TRUST. Gaining trust always takes time, but losing it take a nanosecond. As we lose trust in our governments the very system we have created to create our security blanket will fail around us. We will lose faith in other systems too, such as corporations and the stock market. These will plumet as our fear intensifies and we realise that there are no quick fixes to our debt problems. Only time, i.e default through inflation or massive debt write downs could save us. These will inflict too much pain on the monied classes, our pensions (i.e baby boomers) and are politicians (they need an explanation to enable re-election).

So, the stock markets will fall, probably overshoot their actual real losses due to paralysis. But don't fear, after that the era of private growth will begin again just as it has done countless times in history (fall of the Chinese, Roman empires). We will slowly enable real capitalism again e.g survival of the fittest with proper risk management and rewards for success rather than the status quo. In the new period the stock market will race to new highs as the money which used to sit in government bonds comes flooding into the growth areas of society. It'll take a while to get there, and there will be pain along the way but like each cycle, for every trough there will be a peak, as long as human beings exist and continue to strive for uneven gains over solid sustainable growth - the grass is always greener syndrome drives us to new lows as well as new highs!

The failure of France within 3 months

11.11.2011
Its all kicking off folks. As the mass media controlled by politics and wealthy media moguls continues to hide the truth from the people; they are increasingly unable to explain the events that are occuring in Europe.

Next to fail. France!

The markets (from whom France has borrowed all its money) are raising rates for French bonds - basically where Italy was 3 months ago.




Herbert Hoover’s Memoirs are available free online. He opens Chapter 7 
concerning the Sovereign Debt Crisis of 1931 explaining:


“In the spring of 1931, just as we had begun to entertain well founded hopes that we were on the way out of the depression, our latent fears of Europe were realized in a gigantic explosion which shook the whole foundations of the world's economic, political, and social structure. At last the malign forces arising from economic consequences of the war, the Versailles Treaty, the postwar military alliances with their double prewar armament, their frantic public works programs to meet unemployment, their unbalanced budgets and the inflations, all tore their systems asunder.”


Chapter 7, pg 61
http://www.ecommcode.com/hoover/ebooks/browse.cfm


[Source: Thanks to Armstrongeconomics.com]

Is Austerity the answer? Not really. Its a vicious circle. By making your population lose confidence they will "try" less. This will lower productivity and entrepreneurship and therefore decrease tax returns which will mean France will find itself in a debt spiral. The rules of mathematics don't change.

How long before our entire consumerist and housing based economies comes to a screeching halt and we revert back to productive assets? Those engineers, farmers and content producers who have been sidelined by banking wealth for the last 20 years will finally have their day in the sun!

How do we fix this mess? Well, we need to have massive bank right downs and let banks fail. People with their money in bank accounts won't lose anything but everyone who lent cheap money without assessing risks properly will go bust - that's how capitalism should work! Its been poisoned by bankers who have supported politicians election campaigns! They have systematically lied to everyone to retain power, wealth and influence. To stop countries going bust we need innovation and education, lets reduce defence spending and increase energy innovation and education spending (we have enough nukes in the world for defence!).  We can all see that asset prices are too high! What kind of society do we want to live in? One in which wealthy people continue to take more and more for less risk or where we reward for new and innovative ideas which benefit all of society not the chosen few?

As I've said in my previous posts - this will all end badly. Remember make your own decisions after you listen to everyone, use the facts and understand them yourself. That is the key to breaking this cycle.

Update: 20.1.2011:  France lost its AAA rating in Jan 2012 - the IMF, ECB, FED continue to enable European countries to sell debt in the securities market. Without insolvent institutions with no need for profit and loss propping up the false economy the periphery countries in Europe would have failed. This cannot last forever. Something has to be allowed to fail!

Update 31.05.2012: The world is in turmoil. Sarkozy lost the election in France and Spain is on the verge of "total emergency". Amazingly the central banks are keeping it all together. This can't last.

Update  11.10.2012:  Well, the central banks went "all in". The Federal Reserve promised to print $40bn per month forever and the ECB said it would buy any Eurozone country bonds if they asked for help. Does this look like a system that runs without intervention? What is the difference between this and Russian/Chinese communism. The ECB/Fed now decide what you will buy who will pay you and what you will pay for items as market prices. Sounds like central planning to me. Its never worked.

Update 27.02.13:  Well the UK just lost its AAA rating....the dominoes are falling one by one. How long before Germany decides they are better off without the drag of Italy, Spain and France?

Update 30.08.2013: France attempting to distract the public by starting a war with Syria and replacing the  UK as America's poodle. Nothing has changed economically for France they are barely surviving and any minor economic instability will signal a return to crisis mode for them.

will ios5 slow down iphone 4

I upgraded my Iphone 4 to Ios5 when it came out. Here are some observations about the experience.

1. No noticeable speed loss. It seems to run just as fast as before.

2. Some people have talked about battery loss but I haven't noticed it. I keep my WiFi off most of the time - but even when its on I haven't noticed a difference.

3. Imessage means you can send imessages instead of texts to anyone with ios5 all over the world with out using any of your text allowance

4. There is a better notification center accessed by pulling down on the time displayed at the top of your phone. When your texts arrive you can go straight to them from the slider screen

5. You can get to your camera straight from the home screen and use the volume button to take a photograph.

Changing consumer behaviour: Will second hand goods become more acceptable?

For the last 20 years we have been moving to an unsustainable consumerist society. We no longer fix things; we don't value skills that enable cobblers, electricians or upholsters. We decided it was cheaper to import cheap inflation from China. As the price of goods fell we just thought we could keep buying new things to replace anything that was over 18 months old.

Those of us who are older can clearly see we were on a path to distruction, but kids in the last 15 years have known nothing else. They expect new generations of products - white goods, TVs, DVDs on a regular basis, each attempting to be better than the last. Unfortunately, new products rarely deliver significant improvements. Human beings tend to be iterative whilst a few true inventors produce the next generation of ideas to market. To replace this "invention timing gap" we decided to use advertising to fool the majority with upgrades and new colours to ensure we could continue the ever increasing R&D costs that true invention requires in large companies.

With the recession and high inflation around the world we will soon move back to our old ways. Using second hand goods and repairing are old products to ensure they give their full useful existence for the money we paid. This in-turn will have an effect on our electronic and white good stores who will begin to see sales declines as people move to a repair culture rather than throwing everything out for a cheap replacement. Websites like ebay.com will allow people to buy a multitude of items cheaper than list prices and people will begin to move away from wanting shiny new toys and expect the rich to pay the full price whilst they pick up the same goods at up to 40% off, sometimes after only a few days...

Its going to be tough for the next 6-7 years as easy credit disappears from our society - salary declines will increase due to inflation and labour costs will become more competitive with the cost of purchasing a brand new item. Perhaps this is the end of the large bricks and mortar stores churning out new products every 18 months. The service will exist but it will be usurped by online stores who can perform the same function without high overheads. Kids today (the adults of the future) no longer need the customer service and "human service" that our parents took for granted. They would prefer to shop online rather than speak to human beings.

If we're not careful this will create a more isolated society where separation is even more prevalent...comments welcome

G20 Failure: Cannes est pointless!

Can't people see that our politicians have no more answers except to spend even more of our future earnings. What an absurd situation:

1. The Eurozone are lending Greece money in order to...pay back the Eurozone! - are you kidding? They think this is a solution?

2. a 50% @"haircut" in Greek debt doesn't constitute a  "default event". Its the equivalent of me asking my bank to give me 50% off my mortgage because I don't think I'll pay it anymore and the bank saying that the loan is not impaired! These people have gone mad!

3. We are continuing this farce because banks did not calculate risk correctly on Italian, Greek, Spanish, Irish and Portuguese debt. The only job of a bank is to manage ****ing risk! If they can't do this they should fail! That is how capitalism works!

 4. Banks can't fail because who would then lend money to feckless politicians to for election promises that they have no hope of achieving! The world has been built on a lie...no wonder people want something better. They can finally see behind the curtain and there aren't any smart people there with firehoses - there's nothing!

5. The ESF Fund is dead! It will never work! Why!? Because we are creating a fund using investors who have no money - to invest in bonds which will definitely lose money!? Who would do that?! The Chinese are too smart to be the whipping boys of Europe.

This is going to get ugly. We should put our politicans in prison for gross mis-management but they way they have in-acted laws now - they are all above the law! You can't even put them in prison for stealing taxpayers money and illegally using expenses and advisors to gain cushy jobs after they finish their terms in office! Government has become a gravy train for the rich to gain even more money, power and influence - IT HAS TO STOP!!

Has anyone else noticed how we've suddenly turned on Iran and the rhetoric from the US and Israel is about "striking first". Do you think this will be the war that the politicians use to distract us from their failures!?